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  1. #1
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    Default Finance Question- Helping Relatives

    My younger sister just asked me and my hubby to co-sign a loan so she can
    pay off credit card debt in the amount of $15,000.

    My initial response is NO.

    I am wondering about the various programs that are out there that help
    people get their credit card debt under control and paid off. Can anyone
    offer reputable companies? Are there any out there that actually help you
    and don't rip you off? I know some are non-profit -- does that make a
    difference? What kind of "red flags" do you keep an eye out for when
    investigating these kinds of companies?

    My sister was unemployed for almost a year due to a layoff and I suspect
    that is when she started accumulating the CC debt. She is NOT overdue on
    any card and continues to pay the monthly amounts but I suspect she is
    starting to drown and is obviously worried. The bank will not give her the
    loan and I suspect it has to do with her debt to income ratio.


    I'm interested in helping my sister find a way to cc freedom but I'm not
    sure I want to have a responsible part in the scenario! Anyway, any good or
    bad experiences with debt reduction companies (or whatever they are called)
    would be helpful. I appreciate your responses in advance!

    Michelle in DE

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    Dear Michelle:--I believe also there is help out there for your
    sister. I'm 53 and believe me, it is never wise to cosign or
    lend money to family or friends. Even the best intentions can
    end up with hurt feelings and the damage is done for life.
    You sound like you have a great head on your shoulders!
    Blessings, Pat

    From: "Pat Price Flatt"
    Date: Sat Feb 22, 2003 9:06 am
    Subject: Re: Budget101.com : Finance Question

  3. #3
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    Many non profit prgrams will help lower the monthly amount paid and help get
    your sister debt free. they will contact the CC companies and ask for no
    interest, lower payments, etc. -- whatever ther companies can do for your
    sister. the non profit organization should be able to tell you what to expect
    from each campany since they have dealt with them before. the non profit
    organization i went to a few years ago was in South Dakota and was associated
    with the Luthren Social Services and called CCCS(Credit Consolidation
    Counseling Services??) they were very helpful.
    maybe check with your local social services programs?? I feel better about
    talking to someone in person rather than online myself. Good luck, and i am
    glad to hear you want to help your sister.
    God Bless,
    Krystal in MN

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    Just remember that in most cases, these credit counseling firms are
    treated as bankruptcies on a credit report.

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    Michelle, I know you really want to help your sister, and it is so hard
    to know our family is suffering and want to help. BUT, I really would
    advise AGAINST co-signing on any loan for anyone! It can cause so many
    problems. No one knows what the future will bring and you could easily
    get stuck paying off the debt yourself. Co-signing on a loan also can
    hurt your credit rating and keep you from getting a loan that you may
    need in the future. Like a home or car.

    No matter what anyone tries to tell you, that debt is considered yours
    just as much as theirs if you co-sign. You will be listed as having a
    $15,000 debt in your name. If your sister can't straighten out her
    finances and has to file bankruptcy at a later date it will wreck your
    credit as well as hers! I know for a fact that this is true because I
    have family that has gone through this exact thing. My family member was
    told by a lawyer that her credit rating will show that she filed
    bankruptcy even though it was the person she co-signed for that did!

    Please protect yourself, don't co-sign. Tell your sister that you love
    her but you just can't co-sign, but you will help her try to make a
    budget and find a credit counselor.

    DON'T DO IT!!

    Nancy Ann

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    I agree 100% with this advice. On the other hand, if you know that your
    sister is going to sink without it, you might consider co-signing it as
    a *gift* to her. With no expectations that she will pay it off and with
    full expectations that *you* will pay it off, in fact, if you both share
    the load a bit, it might just get done sooner than you both think.

    If you give it to her as a gift, then there are no hard feelings, and
    you won't expect her to pay it back.

    Never loan money to friends or family, but give it to them (if there is
    any way that you can) with no strings attached, it is the only way.

    From: "Bill Marcy"
    Date: Sat Feb 22, 2003 1:36 pm
    Subject: RE: Budget101.com : Finance Question

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    Hi,
    I'm new here, but thought I'd give my input. I wouldn't co-sign a loan, but
    would maybe suggest to your sister or her husband if possible, to get a part
    time job and put all of the money from that towards paying off her debt. I
    know this probably isn't a popular idea, but if she did this for a while, she
    could really get somewhere. Also there is a program I have information on (I'll
    have to dig it out and could post it later) that tells you how to pay off bills
    in the most efficient way. If you've ever heard of Mary Hunt, she also has some
    good information on paying off debt.
    Kathy M

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    The best advice that I can give is to look for debt consolidation companies
    in the area and than check with the BBB to see if there have been any
    complaints about the company. I would definately look more towards the
    non-profit agencies because they won't be charging even more extra money on
    top of the payment. The only other thing that I could say is that if she had
    multiple cards that she is paying on how about doing either a balance
    transfer or paying one with a lower interest card. I realize that this doesn
    t solve the problem right away but it would save some money on the interest
    and would get her bills closer to just one.

    Susan

 

 
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